a. Suppose that General Hospital has a current ratio of 0.5. Which of the following actions would
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a. Suppose that General Hospital has a current ratio of 0.5. Which of the following actions would improve (increase) this ratio?
• Use cash to pay off current liabilities.
• Collect some of the current accounts receivable.
• Use cash to pay off some long-term debt.
• Purchase additional inventory on credit (i.e., accounts payable).
• Sell some of the existing inventory at cost (book value).
b. Now assume that General Hospital has a current ratio of 1.2. In this situation, which of the listed actions would improve this ratio?
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Related Book For
Fundamentals Of Healthcare Finance
ISBN: 9781640553224
4th Edition
Authors: Paula H. Song, Kristin L. Reiter
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